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Binary options brokers
During last several years boom of binary trading burst into the trading world and immediately attract crowds of people. Nowadays it is almost impossible to find a person who doesn’t know about binary options trading. A lot of people have already made their career in this field, but there are still many people who have just decided to start it and have a lot of unanswered questions. This article will be like a guide for this people. We will try to answer such frequently asked questions as:
- Firstly, what is the binary broker?
- What facilities are necessary for reliable broker?
- How can I repose trust on my broker?
- Can I change my broker and when?
We hope that after this article it will be easier for you to sort out the gist of binary options trading and make your first successful steps. Let go!
Binary broker and what is it
In a binary options market broker allows you to work out your decisions and to do binary options trades. In fact binary options represent a new type of an asset which you are allow to trade or rather predict will the asset price go up or down in a certain time period and win money if you were right. This type of brokers offers you different predictions which you can use to invest your money in. Each broker has established set of rules about predictions that you can make and the value of your payouts if you win. In fact each of binary options represents a prediction about what can happen with the asset price.
Two different kinds of brokers which trade binary options exist:
1 case: binary options are offered directly by the broker
2 case: broker which acts as a binary options exchange.
We will consider both of these types:
- Binary options are offered directly by the broker
A great part of binary options are offered directly by brokers. Such brokers determine which payouts and predictions it can offer to the trader. At this rate you decide which of these predictions and payouts are the most suitable for you and make a choice of this combination.
In this variant of trading there is a direct communication between you and your broker. Many traders are rather skeptical about this collaboration because your broker is interested in your failure to get money and you are on the opposite side. It may seems that you are like in a rival with your broker but actually you compete with other traders, not with the broker, because if one trader wins money it means that another trader definitely loses it.
Actually begin your trades together with that broker which directly offers binary options is a very good idea for making money and achieving success. A great part of all binary traders use this model for creation of their business.
- Broker which acts as a binary options exchange
Due to government changes in the USA nowadays it is forbidden for brokers to offer their options to traders in a direct way. Because of such fact renewed business model was created by the Nadex which is binary options exchange company. Nadex’s work is based on the principles of stock-market. This company doesn’t make trades by itself, they just make communication between different traders. For example I am a trader and I want to buy and at the same moment there is another trader who wants to sell something. In this situation the exchange just brings us together and helps us to strike a bargain and finally make a deal. As a result both of us are satisfied and the exchange gets some percent from each deal. The Nadex company turn these principles into the binary option trades. It acts the following way: when one trader predict that price will fall and invest money in this prediction Nadex find another trader that predict that price will rise up, after this connection between them is created and as a result these two traders compete with each other. Eventually one winner appears and Nadex gets its fee.
The most essential thing in this system is that Nadex stays impartial. Among the most important pros of this scheme is that Nadex offers higher payouts and less fee for each trade that attracts lots of traders.
What facilities are necessary for good broker?
In this section it is important to notice that in USA only one legal binary options broker exists and this is Nadex. All other brokers are not confirmed by the law and their work in fact is illegal. It depends on you what choice will you make but in the case of collaboration with the illegal broker which assumes no responsibility it can be rather risky.
In other countries there are no such strict rules about binary options brokers so traders should choose brokers for some criteria which are important for themselves. Among such criteria can be the amount of payout, the minimal investment sum and the reputation of chosen broker at the market.
How can I repose trust on my broker?
Almost every beginner asked himself a question “how can I repose trust on my broker?” This question is very important and disturbs every trader at the beginning of his career. There is very simple answer on this question- you must choose reliable broker. The criterion which allows you to evaluate the broker’s facilities and reliability is the law.
Nowadays there are control organizations which are created by both USA and EU. These organizations provide the financial institutions monitoring which strongly separates legal and reliable institutions from those with whom it is better not to have a deal. It is rather clear that brokers who confirm this regulation are worthy to work with and they will definitely keep your money in safe without any problems. This guide will clarify you the main distinction: the brokers whose work wasn’t confirmed by the control organization don’t create a personal account for you. Thus all your investments and investments of other traders are in one place. It is very risky because if your broker’s trading platform fail you will face with big problems connected with your money withdraw. In contrast with it brokers whose actions were confirmed by the law create a special separate account personally for you and in the case of failure you will get money without any problems. In addition to all pros of legal brokers which were mentioned above we want to add that you will be able to control the position of your broker at the financial market and you will not skip the moment when you need to find another broker because the financial position of previous broker worsened. And moreover you will keep your money under the complete control from the government and it guarantees that everything will be perfect.
To sum it up if you desire to begin trading with responsibility and serious intensions you definitely should pick up broker who is confirmed by the USA and EU. In such case you will get the secure and really reliable broker.
What facilities are necessary for reliable broker?
To find a reliable broker on which you can repose trust is only half of the work. Another significant step is to find secure broker which suits personally you and your requests. What does it mean? You may find really safe broker with good reputation and reviews but its trading platform, assets or payouts will not satisfy your demands. Your broker may be the best at the financial market, its actions can be confirmed by the law but what it the benefit from it if for example its actions are available for trading only at late night because broker trades European stocks? Of course it would be awesome if you can find all these facilities combined together in one broker, but it happens very rare. Starting binary option trades each conscientious trader should pick up only those facilities which suit personally him. Otherwise even with the world famous broker you will not achieve great results and get high profit.
Thus when choosing your broker pay attention on such moments as the existence of demo-account, value of minimal investment, availability of assets which you want to trade and high payouts for strategy which you use in trading. These points are very important and each of them must suit you completely.
I f you want to try trading with the world known broker try someone from the TOP3 brokers. They are:
IQ option, Nadex and 24option. Actions of these brokers are confirmed by law together with thousands users who already made good money with these trading platforms. If their offers fit your demands it will be a great chance for you to get a rapid successful start.
Can I change my broker and when?
As it was written above good broker is a right and direct way to rapid profits. But sometimes it happens that famous and successful broker modifies into undesirable one which can easily bring you big problems without even your knowledge. This situation can happen when your broker starts to get problems with finances and its position at the financial market is abruptly worsened. Such changes leads to great failure so you must to monitor carefully all changes connected with your broker’s situation to protect yourself from the complete collapse without money at all.
Cooperation with the broker is always like long firmly established relationships between lovers. And in the same way as it is very hard to change such accustomed relationships it is very difficult to change a broker, especially if it perfectly fits you and your way of trading. Many traders are so stuck to their brokers that they don’t want even notice that something is going wrong. They always wait until the last moment hoping that everything will be adjusted but this doesn’t happen and traders turn out into bankrupts only because they didn’t find resoluteness and strength to break up this collaboration and change broker in time. Some tips exists that may help you to notice the moment of first anxiety.
First “alarming bell” is a rejection or decreasing of payments.
It is clear for everybody that if in your broker things go wrong the first person who will help broker to stay afloat is you. You and other traders who also use your broker for making trades. How will it happen? Answer is simple: broker will start to decrease your payouts or in some cases can even reject to pay it for you to hold its finances due to your income. These changes and decreases are always so small that when you start to notice them it is very late. To protect yourself from such nasty situation you should make a habit to calculate all your payouts for some period of time, for example for month. When you start to notice some inconsistencies of these sums you have to change broker immediately to avoid losing all your money.
Second “alarming bell” is an appearance of assets diversity.
Each broker always has some set of assets which is offered to traders. At the same time each trader when choosing a broker draws primarily attention to the existence of some certain asset which he wants to trade at the broker’s trading platform. Then trader start working with the suitable broker and trade only one asset on which he is get used to. After some financial changes in the broker’s work it start to change assets or to delete some of them from the offered assets. It is very inconvenient for those who get used to one certain asset and in the most cases leads to complete failure. Some traders after such changes try themselves in trading some other assets but it rarely ends with success. Thus if one day you do not find your asset among others- don’t choose something else, it will be much better to change broker and to go on trading with your asset but on another trading platform.
Third and the last “alarming bell” is incomes decline despite of trading on the high level.
This tip is very similar to the first tip, but in this case it is almost impossible to understand why your month income changed if you have as many trades as in the last month for example. It happens because of broker’s cunning. Broker can do changes which you will not notice until you recalculate all incomes at the end of the month. Many trades notice that the number of trades didn’t change and make a conclusion that it is not necessary to calculate final money amount because it will be the same as before. But unfortunately it isn’t so. Your broker can change the asset price or the value of payout and you will not notice it. So, you should have your own trading diary and each month compare your income with the previous incomes month or even year ago when the number of trades was the same.
Plan “B” is necessary!
Every smart trader always should have plan “B”. This backup plan is that you should to keep in mind another good broker which offers also suit your demands. In this situation if something goes wrong you will be able to immediately change your current broker to this one without any problems connected with long searching and choosing. So, don’t be lazy and spend some part of your free time on searching of such substitute. And remember that the more you will be ready to unexpected adversity the less money you will lose!